Kasich says turnpike to stay under control of state; plan would fund road projects, jobs

12/14/2012

A Kasich administration plan to use the Ohio Turnpike’s borrowing power, backed by toll revenue, to finance highway construction projects throughout Ohio drew praise Thursday from construction, labor, and trucking interests as well as local leaders eager for projects to move forward from the state’s fiscal back burner.

An initial bond issue could raise $1 billion for projects such as the $173 million final phase of rebuilding the I-75/I-475 interchange in central Toledo as well as accelerate reconstruction of the Ohio Turnpike’s worn-out original roadway, Gov. John Kasich said during a morning news conference near I-75.

RELATED SITE: www.ohturnpikeanalysis.com

“We’re unlocking the value of this really important asset,” the governor said inside Modern Builders’ Supply on Phillips Avenue before gesturing out a window toward the freeway, which state officials plan to widen from four lanes to six in that area once money becomes available.

“If we did not enact this plan, we don’t know when this [I-75 project] would happen,” Mr. Kasich said.

A second round could finance $500 million to $1 billion in construction, and federal and local funding matches could bring the total program to $3 billion, the governor said. He said turnpike tolls would be frozen for passenger vehicles traveling 30 miles or fewer and paying electronically, and indexed to inflation for everyone else.

The resulting construction projects will generate 65,000 jobs for Ohioans, Mr. Kasich said.

While nobody at the turnpike will be laid off, although jobs could be reduced through attrition or buyouts, he said.

“When you talk about win-win-win, that’s what this is all about,” said Toledo Mayor Mike Bell, who flanked the governor during the news conference.

It will benefit Toledo, its residents, and “our trucker family that works and makes a living here,” the mayor said.

Labor groups praise

The American Trucking Associations, the Ohio Public Interest Research Group, and Teamsters Local 436, which represents turnpike toll collectors and maintenance workers, were among those who praised the governor’s decision to keep the turnpike as a state agency instead of leasing it to a private concessionaire in exchange for upfront cash and a share of toll revenue that would have been used to boost the state’s highway program.

“The Ohio Turnpike is a critical artery for freight, carrying a significant share of the goods produced in America’s industrial heartland,” said Bill Graves, the trucking group’s president. “We’re happy to see Ohio eschew the dangerous and irresponsible proposal to turn the turnpike over to private, for-profit entities.”

“In this case, he [the governor] got it right,” said Gary Tiboni, president of Teamsters Local 436. “None of my people are going to get laid off. ... My members are going to sleep well tonight knowing that their jobs are safe.”

State Rep. Lynn Wachtmann (R., Napoleon), whose district touches the turnpike in Williams County, said the plan’s inflation-rate cap on toll increases ensures the turnpike will remain affordable to truckers, which is “a big deal for the rural counties of northwest Ohio” whose parallel highways like State Rt. 2 and U.S. 6 and 20 have historically been popular with those who avoid tolls.

Drawing criticism

But Democrats immediately called the plan a raid on the turnpike to create a “slush fund” so the governor can hand out checks for projects across Ohio as his 2012 re-election campaign approaches.

State Rep. Teresa Fedor (D., Toledo) called it a “hostile takeover” of the turnpike commission.

“In northern Ohio, we don’t get our fair share from the federal funds,” she said. “We are very concerned about these tolls increasing, and the tolls going to other parts of Ohio.”

“It’s a shell game,” said state Rep. Ron Gerberry, a Democrat from Canfield, near Youngstown. “If anybody wants to believe that northern Ohio is going to benefit any better from this than anyone else, heck no."

The governor’s proposal came 13 months after the state commissioned a $3.4 million study by KPMG Corporate Finance LLC to examine Ohio’s alternatives for leveraging the turnpike’s value for transportation improvements in Ohio.

Mr. Kasich, a Republican, had advocated leasing the turnpike to the private sector during his 2010 election campaign.

Mr. Kasich said that during the study, he had listened to hundreds of people across the state about turnpike options. Keeping the turnpike state-run addresses concerns about toll rates, maintenance, and job preservation that arose repeatedly, he said.

The governor said his new plan likely will be presented to the Ohio General Assembly in a state transportation bill by February.

Democrats insisted that their caucus opposition extends beyond northern Ohio to other parts of the state that could stand to benefit financially from the plan, and questioned whether the plan would permit evasion of the Ohio constitution’s debt limit, which caps at 5 percent the amount of state revenue allowed to be used for debt service.

Chris Redfern, chairman of the Ohio Democratic Party and representative-elect for the 75th District in Ottawa and Erie counties, said the governor’s plan threatens the turnpike’s future upkeep while saddling future generations with debt to pay for political patronage.

He urged the administration to pursue instead a fuel-tax increase to replenish Ohio’s highway budget, as the Republican administration of Gov. Bob Taft did nearly a decade ago.

The Kasich administration has repeatedly dismissed the idea of raising fuel taxes as being harmful to Ohio’s economy.

Not all of the skepticism was so partisan.

State Rep. Rex Damschroder (R., Fremont), who leads the House Transportation, Public Safety, and Homeland Security Committee, said the multiple options that the study examined all would have raised money, and he still harbors doubts about how it will be spent.

Just as state lottery revenue to schools has freed general-fund dollars to be spent elsewhere, rather than increasing Ohio’s overall education budget, financing off-turnpike projects in northern Ohio with turnpike tolls won’t necessarily increase the region’s total transportation program, Mr. Damschroder said.

“All that would do is displace other money that normally would go to highway projects,” he said. “It’s money paid for with money from citizens of northern Ohio … but people in the central part of the state — Dayton, Cincinnati — they don’t have a stake in the money going into the pie. Why should they have a stake in the money coming out of the pie?”

But state Rep. Barbara Sears (R., Monclova Township), who will move up from the No. 4 Republican slot in House leadership to No. 3 in January, called the plan a good “hybrid” of the possibilities that had been considered.

“It helps local folks as they travel within 30 miles from one entrance to another,” she said. “It allows us to pull some of the assets to do some of the road construction work that we desperately need to get finished.”

Northern Ohio projects

As outlined in an ODOT statement, “more than 90 percent of new bond money will go directly to northern Ohio highway projects,” although Mr. Kasich and ODOT director Jerry Wray balked when asked if such a standard might be enshrined legislatively. The statement went on to say that some money that normally would be used in northern Ohio could then be diverted to projects elsewhere in Ohio.

“Whether it’s exactly 90 percent or not will depend on a project-by-project basis,” Mr. Wray said. “Northern Ohio” could be defined as everywhere north of U.S. 30, he said, although “that’s not written in stone somewhere.”

“I can only tell you that projects that would not occur [without this funding], will occur,” the governor said.

State law requires turnpike funds to be used on projects within one mile of the toll road.

Mr. Wray said the turnpike commission, which has nine members, eventually may add one or two people, but did not give additional details.

State Rep. Randy Gardner (R., Bowling Green), meanwhile, stopped short of endorsing the proposal, saying he wants to read actual legislation first. But he praised the governor for listening to local leaders who generally opposed toll-road privatization.

Tony Reams, the executive director of the Toledo Metropolitan Area Council of Governments, called the plan “an exciting way to use the asset,” though he, too, declined to endorse it.

“If he [Mr. Kasich] didn’t do this, we’d still be paying tolls and the rest of Ohio wouldn’t,” Mr. Reams said. “This has the potential to speed up projects.”

Blade Columbus Bureau Chief Jim Provance contributed to this report.

Contact David Patch at: dpatch@theblade.com or 419-724-6094.